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Self-Regulatory Organizations; Order Approving Proposed Rule Change by the New York Stock Exchange, Inc. Eliminating the Exchange's Discretion To Exempt Relief Specialists From Registration and Approval

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Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble November 2, 2001.

On August 21, 2001, the New York Stock Exchange, Inc. (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 thereunder,[2] a proposed rule change to eliminate the Exchange's discretion to exempt relief specialists from registration and approval requirements. Specifically, the proposed rule change would amend NYSE Rule 103 (Registration of Specialists) to delete the provision that grants the Exchange the discretion to exempt relief specialists from registration and approval requirements.

According to the NYSE, the provision in NYSE Rule 103 is unnecessary because NYSE Rule 104.15 requires regular specialists to either (1) be associated with other members also registered as regular specialists in the same stocks and arrange for at least one member of the group to be in attendance during the hours when the Exchange is open for business, or (2) arrange for the registration by at least one other member as relief specialist, who would always be available, in the regular specialist's absence, to take over the book and to service the market, so that there would be no interruption of the continuity of service during the hours when the Exchange is open for business.[3]

The proposed rule change was published for comment in the Federal Register on September 27, 2001.[4] The Commission received no comments on the proposal.

The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange [5] and, in particular, the requirements of section 6 of the Act.[6] The Commission finds that the proposed rule change is consistent with section 6(b)(5) of the Act,[7] which requires, among other things, that the rules of an exchange promote just and equitable principles of trade and in general to protect investors and the public interest. Specifically, the Commission believes that the proposal should ensure that only qualified persons act as specialists because it requires all specialists to comply with registration and approval requirements. In addition, the provisions of NYSE Rule 104.15 will ensure that specialist firms always have a relief specialist who meets the registration and approval requirements of NYSE Rule 103 available to take over the book if necessary at any time. Accordingly, the provisions of NYSE Rule 104.15 make the exemption provided for in NYSE Rule 103 unnecessary.

It is therefore ordered, pursuant to section 19(b)(2) of the Act,[8] that the proposed rule change (SR-NYSE-2001-29) be, and it hereby is, approved.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  Telephone conversation between Melvin Hanton, Senior Special Counsel, NYSE, and Jennifer Lewis, Attorney, Division of Market Regulation, Commission, on October 29, 2001.

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4.  See Securities Exchange Act Release No. 44825 (September 20, 2001), 66 FR 49442.

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5.  In approving this proposal rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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[FR Doc. 01-28080 Filed 11-7-01; 8:45 am]

BILLING CODE 8010-01-M